The number of existing homes sold across the nation in June fell 6.7 per cent from May and actual (not seasonally adjusted) activity was down 11.4 per cent year-over-year, according to the Canadian Real Estate Association's (CREA) latest data release.

That decline was influenced by cooled demand in the Greater Golden Horseshoe Area following Ontario's unveiling of its Fair Housing Plan, according to the Canadian Real Estate Association. The measures, chief among them a tax on foreign buyers of residential real estate, "clearly prompted many home buyers in the greater [Toronto] region to take a step back and assess how the housing market absorbs the changes", said Gregory Klump, CREA's chief economist. The decline in June sales was driven by a contraction in Greater Toronto Area (GTA) sales. However, the region's months of inventory is on the rise, sitting at 2.5 months in June.

Statistics Canada said last week that the average price of a new build home in the country rose 0.7% in May compared with the previous month, with Vancouver showing the biggest price rise in a decade.

"The recent increase in interest rates could reinforce a lack of urgency to purchase or, alternatively, move some buyers off the sidelines before their pre-approved mortgage rate expires".

Some economists said worries over exuberance in pockets of the Canadian housing market - most notably Toronto and Vancouver - reinforced the Bank of Canada's appetite to raise rates amid improving economic data.

With sales having also declined in April and May, activity in June came in 14.1 per cent below the record set in March.

The association says a ratio between 40 and 60 per cent is consistent with balanced housing market conditions. The national sales-to-new listings ratio now stands at 52.8%, or down from the high-60% range just three months earlier.